The Impact of Traditional Culture on Farmers’ Moral Hazard Behavior in Crop Production: Evidence from China

Liguo Zhang and Xuerong Li
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Liguo Zhang: Institute of Poyang Lake Eco-economics, Jiangxi University of Finance and Economics, Nanchang 330032, China
Xuerong Li: Institute of Poyang Lake Eco-economics, Jiangxi University of Finance and Economics, Nanchang 330032, China

Sustainability, 2016, vol. 8, issue 7, 1-15

Abstract: To obtain higher yields, farmers may excessively use pesticides when they grow crops (like rice, vegetables, or fruit), causing moral hazard behavior. This paper examines how Chinese farmers’ moral hazard behavior in crop production is influenced by their traditional culture. A semi-parametric logistic model is used to investigate the impact of Chinese traditional culture on farmers’ moral hazard behavior. The results reveal that Chinese traditional culture has a positive effect on ameliorating the farmers’ excessive use of pesticides in crop production, which leads to a moral hazard in agro-product safety. Specifically, when we control for extraneous variables, the probability of moral hazard decreases by 15% if farmers consider their traditional culture in their production decisions. Moreover, the probability of moral hazard decreases by 17% if farmers consider the traditional culture as a powerful restraint regarding the use of pesticides. Our analysis provides some supportive evidence on the effect of Chinese traditional culture on mitigating farmers’ excessive use of pesticides.

Keywords: moral hazard; Chinese traditional culture; agro-products quality and safety; semi-parametric model; crops production (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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